Preliminary State Economic Forecast Released

Arun Raha, head of the Economic and Revenue Forecast Council, released his preliminary economic forecast yesterday. This report sets the stage for the September revenue forecast. The jobs outlook is mixed.

The most recent estimate of Washington employment is slightly higher than we expected in our June forecast. In fact, the Employment Security Department reported a gain of 4,000 (SA) jobs in July which was the first monthly increase in nearly a year (excluding the transitory impact of the Boeing machinists’ strike). While this may turn out to be a turning point, we are not willing to  make that call based on just one month’s data. We continue to expect a trough in Washington employment in the fourth quarter of 2009 with a peak-to-trough decline in employment of 136,000 (4.6%). At this time, the services producing industries appear to be bottoming out; but construction and manufacturing continue to lose jobs, though a reduced rate.

More later.